China steel demand propped up by fixed asset investment -CISA

Reuters quoted the country steel association said Chinese steel consumption remained high in the first five months of the year with strong fixed asset investment helping to offset weaknesses in consumer demand.

The China Iron and Steel Association said in its latest monthly report that however, the old problem of overproduction together with high raw material costs, continued to weigh on the sector.

The report said "The market has entered its busy season, but affected by relatively high steel output a slowdown in demand growth as well as weaknesses in the international market, steel product prices will remain in a volatile state in the near future."

The support provided by fixed asset investment was reflected by price movements in May with CISA index for long products used mainly in construction rising 1.56% over the month.

By contrast, CISA flat product index covering steel products used in automobiles and household appliances crept up by just 0.21% over the period.